Oregon Pension Subtraction
The Oregon Pension Subtraction allows taxpayers to reduce their Oregon taxable income by excluding certain pension income that has already been taxed at the federal level. This subtraction is designed to prevent double taxation on federal pension income that is also subject to Oregon state income tax.
Eligibility and Application
- Applies to federal pension income that has already been taxed at the federal level.
- Must be claimed on Schedule OR-ASC (Section B) or OR-ASC-NP (Section C) of the Oregon tax return.
- Referenced in Publication OR-CODES under code 348 for "Previously taxed IRA conversions" and similar retirement income types.
How to Claim the Subtraction
Use the appropriate subtraction code (such as 348) on Schedule OR-ASC or OR-ASC-NP. The subtraction reduces your Oregon taxable income, which in turn reduces your state tax liability.
Important Notes
- Only applies to pension income that was previously taxed at the federal level.
- Must be reported accurately on your Oregon return to ensure proper tax calculation.
- For detailed guidance, refer to Publication OR-17, which explains Oregon’s tax laws and how to apply subtractions correctly.
Source:
Publication OR-CODES
Publication OR-17
Disclaimer: Always verify details with the official forms and instructions from the Oregon Department of Revenue. OLT (Online Taxes) provides guidance based on retrieved information but does not replace official tax authority documents.